Ten — even five — years ago, such a deal would've been
unimaginable for two reasons. Two of the biggest TV and movie
companies on the planet wouldn't be interested in merging when
they still had the clout to beat each other's brains in. Also,
they wouldn't be allowed to anyway, right? That would give
one media entity way too much power.

But if the past half-decade has taught us anything, it's that
media giants don't have the power they used to. Not in a world
where they are suddenly battling Netflix, Amazon, Apple, Facebook
and Google for people's entertainment time, and for advertisers'
wallets.

A huge merger now might actually be necessary for big media
survival.

"It's a signal that all deals are possible," said Dave Morgan,
CEO of the data-centric TV ad company Simulmedia. "With Google
and Amazon, and soon AT&T buying Time Warner, everybody in
media is suddenly sub-scale. What would have been totally
unthinkable and unnecessary is actually the only way to go for
these companies."

Thus, the potential deal (which according to CNBC
and Bloomberg
was is not actively being discussed) could make
sense for lots of reasons. Let's run through a few:

Disney + Fox would own a cadre of movie and TV studios (from
Marvel to 21st Century Fox), which would be a big help when
trying to get movies in theaters and more importantly, for
launching a direct to consumer streaming service to compete with
Netflix –
something Disney is already planning

The same clout would prove powerful when trying to negotiate
with cable distributors like Comcast and Charter as well as newer
'skinny bundle' players like Hulu Live and YouTube TV to make
sure Disney and Fox's channels carried.

Ditto for making distribution deals with newer,
could-be-huge-someday outlets like Facebook Watch and Snapchat
and Amazon Video and of course, Netflix.

From an ad sales front, the combination of Disney and Fox's
collection of networks would be a must buy for pretty much any TV
advertiser, which could help command big pricing.

If the two companies merge, the X-Men (which have been
licensed from Marvel by Fox) might be able to start appearing in
Marvel movies.

But, there are reasons to be underwhelmed with what's
reportedly on the table now:

At first glance, you might think that the Disney/Fox entity
would command a huge chunk of the broadcast TV market. But the
deal wouldn't include Fox Network, reported CNBC. What does it
say about broadcast TV's place when that's seemingly not the crux
of the merger?

Same deal for sports. Before you start thinking of the
potential clout formed by ESPN and Fox Sports negotiating with
the NFL or the World Cup, Fox's sports assets
wouldn't be part of the acquisition, according to CNBC –
nor would cable TV heavyweight Fox News. Does Disney want to
make this kind of deal just to get its hands on FX and National
Geographic?

This doesn't get Disney/Fox distribution in
people's homes in the U.S. While Fox does own a chunk of the
satellite service Sky in the U.K., neither Fox nor Disney own the
pipes that push content into people's homes in the states.

That's still where lots of the power lies. Consider
Comcast,
which purchased NBCUniversal last decade. Even as more
people cut the cord, Comcast still sells broadband to millions,
which means companies still have to make deals with it, not
necessarily the other way around.

"If nothing else, this is Disney saying to the world, 'I'm a
buyer," said Morgan. "And Fox is saying, 'I'm listening.'"